Issued Tuesday 1st June 2004. eircom today announced its preliminary results outlining the financial and operational performance of the company for the period 1st April 2003 to 31st March 2004.

• Adjusted EBITDA¹ up 9% to €602 million due to improved gross margins and lower operating costs, giving an increased Adjusted EBITDA margin of 37%.

• Operating profit up 39% to €118 million, an operating margin of 7.2%, up from 5%.

• Operating costs² down 2% due primarily to reduced pay costs, increased capitalised labour costs and an ongoing policy of improved cost control across all other operating costs.

• DSL customers exceed 38,000 at March 2004, up from 3,400 at March 2003. DSL customers exceeded 50,000 at the end of May 2004, and the pace is accelerating.

• Turnover down 3% due primarily to loss of low margin transit traffic and discontinued businesses..

• Capital expenditure increased as planned by 6% from €197 million to €208 million.

• Year-end headcount 7,943 at March 2004, down from 8,547 at March 2003.

	2004	2003	Percentage Change
	€m	€m
Turnover	1,628	1,682	(3)%
Gross profit	1,218	1,183	3%
Operating costs before exceptional operating costs, depreciation and goodwill amortised	632	648	(2)%
EBITDA before exceptional operating costs	586	535	9%
Adjusted EBITDA before exceptional operating costs and pension amortisation	602	551	9%
Operating profit	118	85	39%
Capital expenditure cash outflow	208	197	6%
Net debt excluding capitalised fees	1,959	1,791	9%

	2004	2003	Percentage Change
Total access channels ('000)	1,997	1,950	2%
Traffic minutes (millions)	13,155	13,093	-
Wholesale minutes (millions)	7,050	6,837	3%
Average headcount	8,306	9,129	(9)%
Year-end headcount	7,943	8,547	(7)%

	2004	2003
Gross margin	75%	70%
EBITDA margin	36%	32%
Adjusted EBITDA margin	37%	33%
Operating margin	7%	5%

The results for the full year are in line with our expectations. Despite the industry-wide trend of reducing voice revenues, Management’s continued focus on cost control, initiatives in new revenue areas and focus on margin has produced EBITDA growth of 9% and Operating Profit growth of 39%. This has allowed the business to continue to invest at a level in line with our European peers.